The COLA will boost the average monthly Social Security payment for retired workers to $1,261 next year from $1,240 this year. The maximum benefit for a worker who retired at full retirement age will rise to $2,533 a month from $2,513.

Next year’s COLA is less than half of the 3.6 percent increase that took effect this year, but the previous two years there was no increase because inflation was not high enough to trigger one.

Many retirees will have some or all of next year’s cost of living adjustment eaten up by higher Medicare Part B premiums, which will be announced later this month. The premium is expected to rise by $5 to $10 per month for most participants, says David Certner, a legislative policy director with AARP.

Although the average Social Security payment will rise $21 per month next year, a person who is receiving only $600 per month will get a roughly $10 per month increase, which could go mostly to Medicare, he says.

The increase in the wage base will mean higher taxes for about 10 million of the 163 million workers who pay Social Security tax. How much more depends on whether a temporary payroll tax cut expires at the end of this year as scheduled.

The tax cut reduced the employee’s share of Social Security tax by 2 percentage points — to 4.2 from 6.2 percent — in 2011 and 2012. (The employer’s share remained at 6.2 percent.)

A worker earning at or above the wage base ($100,100 this year) saved $2,202.

Assuming the tax cut expires, the maximum Social Security tax will jump to $7,049.40 next year ($113,700 at 6.2 percent) from $4,624.20 this year ($110,100 at 4.2 percent).

Employers will pay an additional $223.20 for workers at or above the wage base.

Neither party in Congress is pushing for an extension of the payroll tax cut but it could happen if lawmakers postpone a wide range of tax cuts set to expire at year end.